What are the Trading Strategies To Become a Successful Trader?
- 3rd February 2026
- 04:30 PM
- 11 min read
Some of the successful trading strategies are trend following, momentum, breakout, range, and many others. Many beginners approach trading with enthusiasm but no clear plan. Here is where most mistakes occur, since successful trading always begins with the appropriate method. As a result, many of them lose money in trading.
According to Moneycontrol, over 90% of traders have lost money in the equity futures and options (F&O) section between 2022 and 2024.
Let us explore some of the top trading strategies which help you become a successful trader.
Understanding Stock Market Trading Strategies
What is a Stock Trading Strategy?
A trading strategy is a complete instrument for making decisions about your trading activities. In a nutshell, it allows you to pick what, when, and how much to trade.
A trading strategy should be your own, personal plan; you can use someone else’s plan as a guide, but keep in mind that someone else’s risk tolerance and available capital may differ greatly from yours.
Importance of a Trading Plan
Having a trading strategy is important since it reflects your long-term trading goals and the approach you take to achieve them. Here is how it is important:
- By following your strategy with dedication, you might uncover why certain trades succeed and others do not.
- You already know when to take profits and cut losses, so you can remove emotions from your decision-making process.
- A trading strategy is just like your trading notebook, which keeps track of your activities and helps with risk management.
Choosing Your Trading Style
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Day Trading
Day trading helps you eliminate some expenses and risks by initiating and closing a limited number of trades in a single day and not holding any positions overnight.
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Swing Trading
Swing trading allows you to keep positions for a few days or weeks to profit from medium-term market movements.
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Position Trading
Position trading is keeping holdings with the hope that they may eventually turn a profit for weeks, months, or even years.
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Scalping
Scalping is the practice of making many transactions every day for a little period of time, a few seconds or minutes, in an effort to generate tiny profits that eventually build up to a substantial sum.
Top Trading Strategies to Follow
Below are some top trading strategies you can follow to become a successful trader:
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Trend Following Strategy
With this approach, you recognise and follow the current market trend. They try to ride the price momentum for a portion of the trend’s movement by entering long positions in uptrends and short positions in downtrends.
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Momentum Trading Strategy
To predict that momentum will continue, momentum traders focus on assets that have experienced significant price changes recently. In an effort to profit from transient trends, they take positions in the direction of the current momentum.
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Breakout Trading Strategy
In a breakout trading strategy, timing is crucial, especially for intraday traders. Finding the threshold points at which stock prices break above or below certain levels is the main goal of a breakout strategy.
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Range Trading Strategy
Range trading provides price ranges where an asset’s price tends to fluctuate between support and resistance levels. They profit from price changes within the predetermined range by buying close to support and selling close to resistance.
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News Trading Strategy
Traders who employ this strategy profit from genuine news stories that have the potential to trigger abrupt price changes. In an effort to benefit from the accompanying volatility, they respond swiftly to news releases and economic data.
Using Technical and Fundamental Analysis
Technical Indicators for Traders
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Accumulation/Distribution Line
An Accumulation/Distribution Line frequently ascertains the money flow of a security. The A/D line just considers the closing price and trading range of the securities during that time. When the indicator line is going upward, it indicates purchasing interest; when it is heading downward, it indicates a downward trend.
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Average Direction Index
Traders and investors use the Average Directional Index (ADX) to measure the strength and velocity of a trend. When the ADX is above 40, a strong directional strength, either upward or downward, is imminent. When the indicator is below 20, it is suggestive of a weak trend or non-trending.
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Moving Average Convergence Divergence
Moving Average Convergence Divergence (MACD) is a tool used by traders to determine the momentum and direction of a trend that offers several trading indications. The MACD is above zero during an upward price phase and below zero during a negative period.
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On-Balance Volume
An On-Balance-Volume (OBV) tracks the flow of trading volume for securities across time. The readiness of buyers to enter the market is indicated by an increasing OBV. On the other hand, when selling volume exceeds purchasing volume, a declining OBV indicates decreasing pricing.
To learn about market movements, you can download the PL Capital Group – Prabhudas Lilladher application. PL Capital provides you with detailed market research with data-driven analysis.
Fundamental Factors in Trading
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News and Events
Earnings announcements and industry trends might cause significant changes in the stock’s price and have an impact on sector-specific businesses.
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Macroeconomic Factors
Macroeconomic factors like GDP growth, regulatory changes, tax reforms, inflation, and interest rates all impact your trade. In addition, political stability, technological integration, and environmental factors also affect foreign investment and the competitiveness of a company.
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Profitability Ratios
You should also learn about the profitability ratios along with trading strategies to become a successful trader. Some of them are the price-to-earnings (P/E) ratio, earnings per share (EPS), dividend yield, and debt-to-equity (D/E) ratio.
Risk Management and Discipline
You must also consider appropriate risk management principles to become a successful trader. Here are some of them:
- Adopt a clear plan and refrain from making snap judgments based on emotions or market hype.
- Remain disciplined and avoid letting greed or fear control your trading choices.
- To reduce risk, trade with reasonable leverage. Using excessive margin might increase losses.
Common Mistakes Traders Should Avoid
Traders lose their money in the market due to a lot of common mistakes. Here are some of them, which you should avoid:
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Lack of Proper Research
After receiving a tip, some traders will establish or exit a position. Before deciding to initiate or close a position, it is crucial to support these thoughts or suggestions with data and market research, even though this can occasionally produce outcomes.
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Lack of Trading Plan
Traders may be tempted to abandon their plan following a poor day in the markets. This is incorrect since every new position should start with a trading plan.
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Over-Reliance on Software
Traders can benefit greatly from certain trading tools, which provide complete automation and flexibility to meet specific requirements. Before utilising software-based techniques to open or close a position, it is crucial to comprehend their advantages and disadvantages.
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Overexposing a Position
If you invest too much money in a certain market, you will be overexposed. If you think the market will keep rising, you often increase your exposure. Although more exposure might result in higher earnings, it also raises the inherent risk of that investment.
Implementing Your Trading Strategy
To become a successful trader, you must implement your trading strategy in each trade. Here are some techniques you must follow to implement your trading strategy:
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Find Out Your Goal
Start by putting your objectives on paper and creating reasonable targets. Examine and evaluate your financial objectives and timeframes for achieving each trading objective. Ensure you will exit the position after a profitable trade and avoid becoming greedy.
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Consider Relevant Technical and Fundamental Analysis
Analyse your methods, find relevant technical and fundamental analyses for the short and long terms, and spot and seize market trading opportunities. Before using the approach in a live account where actual money may be gained or lost, it is even important to try it on a demo account to determine how well it works.
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Choose Your Market
Choose your market according to your experience and understanding. The market you are familiar with is the ideal one for you. Additionally, you should be aware of each market’s trading session hours because these transactions require a lot of attention during key trading periods.
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Funding Your Account
Make sure to include the maximum amount you are ready to risk each time you initiate a trade or fund your trading account. Once more, maintain the starting amount and avoid becoming emotionally invested in the trades.
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Find the Proper Timing
Next, based on your analysis and trading system signals, determine when to initiate a trade and in which direction. Additionally, always have risk management strategies ready for unforeseen circumstances.
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Using Stop-Loss
You must set your profit and stop loss goals while allowing for flexibility and avoiding becoming overly invested in your trade.
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Journalling
Try to keep a detailed journal of all your trading operations if you wish to speed up your learning and imitate great investors. You can do this before, after, and during a trade. At every level of your trading activity, keep a record of your motivations for joining and leaving trades, and the objectives and underlying emotions or psychological reactions.
Advanced Tips for Consistent Trading Success
Follow the advanced tips below to get consistent trading success:
- To reduce possible losses and safeguard your funds, always utilise stop-loss orders.
- To prevent large losses, keep your risk on each transaction to 1% to 2% of your overall trading capital.
- Diversify your bets among a variety of assets rather than investing all of your money in one company to lower risk.
- To maintain balanced exposure, modify your transaction size according to the state of the market and your level of risk tolerance.
- Analyse previous transactions to improve your risk management approach and learn from your mistakes.
Final Thought
These are some of the most popular and effective intraday trading strategies. Investing fast, keeping an eye on market trends, and making the correct decision at the appropriate moment are the keys to effective day trading. A stock market application makes it easy to choose the ideal time.
If you are interested in trading and investing, you can download the PL Capital application and open a Demat account for free. PL Capital is a reputable stockbroker and online trading platform that provides mutual funds, IPOs, wealth management services, and brokerage.
Frequently Asked Questions
1. Which strategies for trading are the best for beginners?
There are a lot of strategies beginners can use for trading. However, some of them are trend following, range trading, momentum, news trading, and breakout strategies.
2. Which approach to stock trading yields the highest profits?
Since all stock trading strategies require a balance between risk and reward and strongly rely on market circumstances, individual talent, and stringent risk management, there is not a single strategy that will guarantee the best earnings.
3. How can I create my own trading strategy for the stock market?
Developing your own stock market trading strategy is a multi-step process that starts with self-evaluation and ends with ongoing development. This includes determining goals, selecting a trading style, carrying out in-depth research, establishing precise guidelines for entry and exit, and testing the strategy.
4. Which trading strategy is the safest for steady profits?
The safest strategies for continuous gains include combining trend-following with stringent risk management techniques, such as employing stop-losses and limiting risk per trade. Position trading or covered calls are frequently mentioned for less stress and regular income.
5. Can I use more than one trading strategy at once?
Yes, it is possible to employ many trading strategies simultaneously. This type of diversification can help lower overall risk and volatility and produce smoother and more consistent returns under various market situations.
